Saying it's needed to protect credit unions and community banks,Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.) on Tuesdayoffered an amendment to delay implementation of the FederalReserve's rule regulating debit interchange fees.

The amendment calls for a six-month study by the NCUA and otherregulators to consider the fixed and incremental costs to thefinancial institutions of the new rules, whether the rules willadversely affect consumers, and whether the small issuer exemptionis feasible.

Senate Majority Leader Harry Reid said Tuesday afternoon thatthe vote on the amendment will take place at 2 p.m. onWednesday.

If the Fed and at least one other regulatory agency make any ofthe above determinations, then the Fed must rewrite debitinterchange rules within six months. Otherwise, the Fed rule wouldmove forward.

Tester said in his Senate speech that without changes,institutions such as the $19 million Community 1st Federal CreditUnion of Miles City, Mont., “will not see this promised benefit''that backers of the Durbin Amendment to the Dodd-Frank Actpromised.

Backers of the Durbin Amendment said that exempting smallissuers would make the system more equitable, but many people havesaid the two-tiered system isn't feasible and will causediscrimination against small issuers.

Sen. Dick Durbin (D-Ill.) accused Tester and Corker of caring more about the big banks and said if they really caredabout small issuers they would have crafted their amendmentdifferently. He said the amendment would be a “direct hit'' onsmall businesses.

Tester's amendment also directs the Fed to study the impact ofthe small-issuer exemption after the rule is in effect for twoyears and provide recommendations to remedy any harm to creditunions and banks

Corker said the measure is needed because “the current rule istoo narrow and doesn't allow the Fed to consider all thecosts.''

In a letter to senators, CUNA President/CEO Bill Cheney wrotethat the amendment would remedy the shortcomings in the existinglegislation and protect small issuers

He wrote that “neither the statute nor the regulation makescredit unions immune from the impact of the regulation. Allof the regulators of small issuers at the state and federal levelhave expressed concern regarding the impact of the debitinterchange regulation on small issuers.”

In a letter to senators, CUNA President/CEO Bill Cheney wrotethat the amendment would remedy the shortcomings in the existinglegislation and protect small issuers

He wrote that “neither the statute nor the regulation makescredit unions immune from the impact of the regulation. All ofthe regulators of small issuers at the state and federal level haveexpressed concern regarding the impact of the debit interchangeregulation on small issuers.”

NAFCU President/CEO Fred Becker wrote lawmakers that while“some individuals and groups not affiliated with credit unions maywant to tell you that they know what is best for credit unions, weurge you to listen to credit unions and their representatives whenwe ask for your support. After all, isn't it more importantthat action to significantly alter our nation's electronic paymentssystem, one of the backbones of the 21^st centuryeconomy, is done right rather than quickly?”

Meanwhile, supporters of the original Durbin Amendment feltotherwise. “This bill is no compromise,” said David French, seniorvice president for government relations at the National RetailFederation. “It is a sham intended to kill swipe fee reform evenmore quickly than his original bill and should be seen for what itis.”

The Fed issued a draft rule in December and was supposed toissue a final rule next month but has been delayed in doing sobecause it is still going through the large number of comments itreceived on the proposal. The final rule is supposed to take effecton July 21.

Acording to the proposed rule, the allowable costs forinterchange would be limited to no more than the issuer's allowablecosts divided by the number of electronic debit transactions onwhich the issuer received or charged an interchange transaction feein the calendar year. Or the issuer could receive debit interchangecapped at 12 cents per transaction.